How to Calculate Your Company’s Unemployment Insurance Costs

How to Calculate Your Company’s Unemployment Insurance Costs

Many business expenses are out of your control, but unemployment insurance isn’t one of them. You have the power to control these costs and doing so is a critical part of ensuring your company’s financial well-being.

Cutting down on unemployment insurance costs starts with understanding how much you’re spending, and more importantly, overpaying. Find out just how much unemployment insurance is costing you in three simple steps:

Step 1: Locate your UI Tax Rate and Taxable Wages for 2015. Multiply the Taxable Wages by your UI Tax Rate. The result is the amount of UI Taxes you paid in 2015.

Step 2: Now take the UI taxes paid in 2015 and multiply them by 13.3 percent, which is the latest average UI overpayment rate nationwide. This is a ballpark estimate of how much you are overpaying on your UI taxes.

Step 3: Take your net UI charges for 2015, which you can find on your quarterly UI charge statements or your annual UI tax rate notice, and multiply that number by 13.3 percent. This is the amount of UI charges you have paid to claimant in error, otherwise known as overpayments.

Were these numbers higher than you expected? Overpaid unemployment benefits total more than $14 billion and costs have risen nearly 80 percent. The reality is UI claims are costing your business more than you think.

So what can you do about it? Enlist the help of UI management software to identify claims that should not be paid, effectively protest them, identify credits you have earned and catch costly errors. Leveraging claims management software allows you to:

Reduce the labor needed to manage your UI program by up to 50%

Increase the credits to your State UI Account by up to 35%

Significantly reduce errors and missed deadlines

It’s powerful, efficient, easy to understand and will save you time and money. What are you waiting for? Contact us today for a free demo.